ALIGNMENT OF BUSINESS AND ISIT STRATEGY AT TELENOR SWEDEN .docx

ALIGNMENT OF BUSINESS AND IS/IT STRATEGY AT
TELENOR SWEDEN
Andrei NECULAU
The Royal Institute of Technology, Stockholm
[email protected]
Stephanie HABIB
[email protected]
Miganoush Katrin MAGARIAN KENARAKI
[email protected]
Aron HENRIKSSON
[email protected]
Yuanchang Liu
[email protected]
Abstract
Neculau, Andrei. Habib, Stephanie. Henriksson, Aron. Magarian
Kenaraki, Miganoush Katrin. Liu,
Yuanchang. 2009. Alignment of Business and IS/IT Strategy at
Telenor Sweden.
Keywords: strategic alignment, IS/IT strategy, business
strategy, organizational strategy, case study,
Telenor

1. Introduction
1.1. Background
The increasing employment of information technology to
support business operations has been inexorable
in the last few decades. The role that IT plays has, however,
changed over the years: the initial sole
emphasis on efficiency has shifted to strategic value creation
(Pearlson & Saunders, 2006). The new role
of IT as a strategic asset in providing competitive advantage
requires that it be tied to business processes
and, crucially, aligned with business strategy (Gray cited by
(Rusu, 2009, p. 50).
The increasing ubiquity of IT in organizations has led to
escalating investments in IT. Effective business-
IT alignment has consequently become an even more pertinent
issue to business executives, as poorly
planned systems may result in customer dissatisfaction, bloated
production costs, and unnecessary and
costly delays in supporting business needs (Rusu, 2009, p. 39).
This may subsequently hamper an
organization’s ability to move swiftly as a strategic player in a
turbulent environment.
Information technology is, however, not only an enabler of
effective business strategy execution, but also
a driver. It is not uncommon today for a technological
innovation to propel an organization to alter its
strategy in order to exploit it and so gain a competitive
advantage. Regardless of the role that IT plays, it
is of great significance that it is aligned with the business goals
of the organization. Numerous models
have been designed to assist managers in assessing the role of
IT and its alignment with business in their
organizations; however, as is usually the case, theoretical

models do not always mirror the reality of the
industry.
1.2. Research Goal
The goal of this paper is to apply the concept of strategic
alignment between business and IT, and to some
extent organizational design, on Telenor Sverige AB. The
project thus focuses on analyzing their business
and IT strategies individually, and subsequently assessing the
extent to which they are aligned. The case
mailto:[email protected]
study aims to reveal means of promoting business-IT alignment
by looking at how the process is de facto
performed in the industry.
1.3. Research Methodology
Our research is a qualitative one, in the form of a case study.
Four theoretical models – the Information
Systems Strategy Triangle, Venkatraman’s Strategic Alignment
Model, Luftman’s Strategic Alignment
Maturity Model, and McFarlan’s Strategic Grid – were
employed as the theoretical basis for the case
study. The case study is partly based on existing papers,
previous case studies and published articles;
however, the most significant input came from conducting two
interviews at Telenor: one with a key
business manager and one with a key IT manager. Their

responses form the basis of the assessment of
strategic alignment at Telenor Sverige AB.
The interviews were semi-structured. Some questions were sent
to our interviewees beforehand according
to their wishes in order to enable them to form an idea of our
expectations and to prepare. For one of the
interviews, some quick answers were elicited in advance, prior
to the meeting – the reason being the
limited time available on the day of the interview. Therefore,
that interview was slightly less structured
than the other, allowing the interviewee to delve deeper into
questions and situations that demanded
interactive deliberation.
1.4. Resources
The theory that is presented in this paper is primarily abridged
from (Pearlson & Saunders, 2006) and
(Luftman, Bullen, Liao, Nash, & Neumann, 2004). This
literature constitutes the compulsory reading in
the “Strategic Management of IT” course, given at the Royal
Institute of Technology (KTH) in the spring
of 2009.
Our research on the strategies employed by Telenor - both the
Telenor Group and Telenor Sverige AB -
was pursued through the help of newspaper articles and
interviews with Telenor personnel. Additionally,
previous papers investigating Telenor’s operations were also
consulted.
Last but not least, the primary resource in delivering this case
study on Telenor is the result of the two
interviews that were conducted with Helene Ålander and Jesper
Hedblom. Ms. Ålander is Head of
Planning and Design of IT Systems, while Mr. Hedblom is Head
of Product Management at the
Stockholm office of Telenor Sverige AB.

1.5. Limitations
The primary concession is the result of the limited amount of
time that was available for this project. As
part of the “Strategic Management of IT” course given by the
Royal Institute of Technology (KTH), the
authors had a time frame of only five weeks. After building the
team, finding a company for the case
study, and securing the interviews, there was precious little
time left for conducting background research,
preparing questions, and – most importantly of all – conducting
the analysis.
Secondly, the case study is primarily based on the input of two
top managers of Telenor Sverige AB.
While the knowledge and insight that they kindly shared was
undoubtedly valuable, a more
comprehensive case study would have necessitated interviews
with more employees – and at varying
echelons of the organization. That would surely have
consolidated, or perhaps even altered, the findings
of the research. Having more readily access to project portfolios
and financial figures, such as budget
distribution, would also have greatly facilitated our research
and led to the drawing of more accurate
conclusions.
1.6. Target Audience
This paper is primarily targeted towards providing another case
study of business-IT alignment, and it is
thus beneficial to the research community and the industry
alike. Telenor Sverige AB is not only an
important player in the Swedish market, but the Telenor Group

is also the predominant group in
Scandinavia and one of the major telecommunication groups in
the world (Telenor Sverige AB, 2009).
That makes this case study even more significant as a source of
how the process of aligning business and
IT is being managed in today’s increasingly information driven
world of business.
Furthermore, hopefully this paper can, to some extent, prove
useful for Telenor Sverige AB as an external
assessment of the level of cooperation between business and
IS/IT, or better said between product
management and the architectural level in this case. Perhaps the
evaluation can provide some indications
of what needs to be done in order to promote further the never
ceasing process of aligning business and
IT.
2. Telenor Sverige AB
2.1 Background
Over 150 years of experience in the telecom industry have led
Telenor to its position today as the 7th
largest mobile operator in the world. Behind its success is a
long story of development, innovation,
ambition and strategy. Today, Telenor operates in 12 countries
across Europe and Asia, with more than
38,800 employees and 164 million subscriptions. The company
offers a wide range of services to private
customers and businesses alike, such as mobile and fixed line
services, broadcasting, satellite
communication, Internet and broadband, as well as other
telecom-related services (Telenor Group, 2009).
A critical milestone in the company’s history occurred in the
year 2000 when Telenor became partially
privatized and listed in the stock market, after being

government owned for more than 100 years. The
need for privatization became even more pertinent after the
failed merger between Telenor and the
Swedish operator Telia in 1999. In fact, at that time, the status
of the two companies as government
owned strongly participated in the conflicts between the
respective management groups, which led to the
termination of the merger within only two months of its
formation (Schmid & Daniel, 2009).
Telenor Sverige AB established itself as a mobile operator in
2005 when it acquired the third largest
carrier in Sweden, Vodafone Sverige. Prior to that, Vodafone
had in turn acquired the Europolitan
operator (Telenor Sverige AB, 2009). Telenor’s acquisition of
Vodafone promoted it as a major player
and competitor in the Swedish telecom industry. Moreover,
having a good financial status, Telenor
Sverige AB adopted an extensive acquisition strategy between
2005 and 2007, which was reflected by its
purchase of two Internet service providers: GlocalNet and
Bredbandsbolaget. In addition to that, the
company includes the television distributor Canal Digital.
Through its multiple brands and its wide
service portfolio, Telenor Sverige AB has reached its position
as the 3rd largest mobile operator and the
2nd largest provider of broadband services in Sweden (Telenor
Group, 2009).
In addition to its acquisition strategy, Telenor Sverige AB has
built several alliances that enhanced its
status and promoted its development. For example, its
agreement with DaimlerChrysler Services
Fleetboard consists of equipping a large number of European
trucks with SIM cards from Telenor,
allowing them to communicate over the mobile network. This
has effectively confirmed Telenor’s
leadership in the Machine-to-Machine (M2M) business

(Telenor Group, 2009). Another measure taken
by the company is to contract Ericsson to integrate its IMS-
based Business Communication Suite (BCS)
in Telenor’s own IMS network, allowing efficient mobile
unified communication for business users
(Telenor Group, 2009). Furthermore, Telenor Sverige AB has
signed a partnership agreement with
Finnish telecom company Elisa that involves common
development, marketing and support of solutions
to large and medium-sized companies in the Nordic market.
This agreement entails a common and single
contact point for the customers of the two companies, as well as
a common business solution in the
Nordic region (Telenor Group, 2009).
2.2 Business Strategy
Today, Telenor builds its business strategies around a set of
core values, namely simplicity, inspiration,
respect and honesty, as well as its vision: “we’re here to help”.
However, as the telecom industry becomes
more and more competitive, Telenor needs to take into account
several challenges when establishing its
business strategies, such as maturing markets, financial
instability, pricing pressure, and regulatory issues.
Besides the external challenges, the company faces internal
challenges, mostly correlated with the
continuous changes in the corporate structure resulting from
mergers, acquisitions, and expansions. In
fact, it has been difficult for Telenor to strike the right balance
between centralization and decentralization
of its management structure due to the interdependencies
between its units and the complexity of its
business, which also affects its business strategies (Telenor

Group, 2009). Telenor has defined a set of
objectives and goals that it wants to achieve within the next two
years. The fundamental objective is
formulated as:
“By 2011, we aim to be one of the fastest growing mobile
operators in the world, with a
strong broadband position in all markets, successfully
developing new services and
adopting new and responsible business models.”
(Telenor Group, 2009)
As for its goals, Telenor aims first to increase its profits mostly
from existing businesses and by
expanding to new markets, as well as by focusing on emerging
fields such as M2M communication.
Another measure that will be taken to increase profit is to adopt
benchmarking and best practice sharing
within the company, which would help reduce costs and
improve cash flow operations. The company also
seeks to strengthen the performance culture within the group by
promoting decentralized management,
combined with a common and shared governance model, which
takes advantage of both local approach
and global expertise. Furthermore, Telenor has been an active
force in fighting climate change as it
considers environmental awareness to be a responsibility, but
also beneficial to the company in terms of
energy saving and limitation of risks. Another key goal for the
company is to offer outstanding and
unique customer experience by prioritizing the customers’ needs
and being able to satisfy them. In
addition to customer satisfaction, Telenor aims to achieve a
competitive advantage by focusing on
innovation and promoting change and renewal; in fact, the
company is currently targeting five main areas

of innovation: broadband outside the Nordic region, M2M
communication, financial services, partner-
driven innovation, and solutions for the climate change
(Telenor Group, 2009).
2.3 IS/IT Strategy
As previously mentioned, Telenor has undergone several drastic
changes in its organization and business
strategies after its privatization in 2000. These changes were
accompanied by specific IT strategies that
were implemented to assist and support the company’s
metamorphosis. In fact, during 2001 Telenor
realized that it needs to establish a collaborating and innovative
workspace as new markets were entered,
new services were provided, and clearly new ways of doing
business were adopted. Among the measures
taken were the implementation and adoption of an e-learning
platform that consisted of twelve modules
covering different topics such as “ICT solutions” and “new
ways of working”. The learning program was
mandatory and identical for all employees. The motive behind
the e-learning system was to gain
competitive advantage by acquiring new skills and knowledge in
a faster and more efficient way than its
competitors. In addition, the e-learning project was intended to
contribute to the transformation of the
company from a hierarchical organization to a more
decentralized organization (Netteland, Wasson, &
Mørch, 2007).
Furthermore, Telenor realized the importance of adopting
information sharing to support its expansion
strategy. In fact, information sharing helped realize several
business goals such as the rapid development
of new opportunities, the expansion to new markets, and the
consolidation of internal and external value

networks. Several tools have been adopted over the years to
facilitate information sharing, such as
Microsoft SharePoint, Live Meeting, and Confluence. This has
induced a stronger synergy among the
group, considerable cost reductions, and an opportunity for
more innovation (Allee & Taug, 2006).
Another important issue that Telenor faced throughout its
expansion strategy was the lack of automation
in its business processes, such as ordering and billing. The
problem became evident when the company
decided to work with many sub-contractors, as a result of
increased competition on cost reduction. With
multiple sub-contractors to work with, Telenor could not any
longer afford to do the transactions
manually, and turned to the business process management
solution, TIBCO, to automate the process of
case-specific distribution of orders to the most appropriate
subcontractor (TIBCO Software, 2007). The
benefits of this strategy were demonstrated by a 47% ROI over
one year and savings of 7.59 million
USD.
3. Application of Information Systems Strategy Triangle on
Telenor
As was mentioned before, Telenor adopted a wide expansion
strategy between 2005 and 2007, which
resulted in the acquisition of four different companies. This
business strategy drove changes in the
organizational strategy of Telenor as it has undergone several
reorganizations. According to Hedblom
(Interview on the Business-IT Alignment at Telenor Sverige
AB, 2009), in the fall of 2008 the company
also merged the business and customer sides, which resulted in

even more changes in the organization of
the company.
On the other hand, the mergers also had a significant impact on
IT, as the newly reorganized
organizational structure necessitated unified and shared IT
tools. For example, Telenor needed to have
one point of contact with its customers in terms of billing and
support, which would represent the various
brands of the company. According to Hedblom (Interview on the
Business-IT Alignment at Telenor
Sverige AB, 2009), initially there were three different billing
setups, of which two covered the fixed
services provided by Bredbandsbolaget and GlocalNet, and one
covered the mobile side. After the
merger, a large-scale billing migration project was needed and
thus promptly implemented by the IT
department.
Furthermore, since the mergers, the company has been facing
the problem of having its computers
connected to three different LANs. As Hedblom (Interview on
the Business-IT Alignment at Telenor
Sverige AB, 2009) explains, the employees are not able to
connect to their desktops from remote
locations within the company since the computers are
configured to one of Bredbandsbolaget, GlocalNet
or Telenor, with varying access to resources. Another problem
is that the e-mail servers are still separated
among the three companies, which means that the employees
can only share Outlook calendars with
people on the same LAN. To tackle to those issues, the IT
department is implementing several projects to
unify the company’s infrastructure.
The above examples provide demonstrations of instances where
Telenor has been successful in
harmonizing its various strategies. The mergers were the result
of a business opportunity that was

exploited according to the dictates of the company’s business
strategy. The merging of companies
necessitated restructuring of the organizational design – an
issue of organizational strategy. To facilitate
these organizational changes, changes to the IT strategy, and
subsequently to the IT infrastructure, were
needed. The IT department has thus, in turn, decided to launch
several projects to unify the merged
organizations’ infrastructures. Such initiatives clearly promote
the alignment between business and IT
strategies.
Having presented some cases where the ISS triangle has been
balanced, we now turn to examining a
reverse situation. One of the business strategies that Telenor
employs to subdue competition is speed. In
fact, as Hedblom (Interview on the Business-IT Alignment at
Telenor Sverige AB, 2009) presents it, the
time to market of a product or service needs to adhere to the
assigned deadline for the project in order for
the company to retain its competitive advantage and satisfy its
customers. However, Hedblom sees a
problem with Telenor’s mobile services, as the IT department is
unable to handle all projects adequately
and needs to rely on consultants at some stage. As a result, a
certain project’s delay becomes
unacceptable, and the company cannot market the product or
service as fast as it would like to, which
effectively hampers its ability to achieve a competitive
advantage. Thus, in this particular case there is an
obvious misalignment between business and IT strategies. This
misalignment is currently of priority zero
for Telenor (Hedblom, Interview on the Business-IT Alignment
at Telenor Sverige AB, 2009).

4. Application of Venkatraman’s Strategic Alignment Model on
Telenor
4.1 Strategic Fit
In terms of business scope, Telenor Sverige AB offers a wide
portfolio of services that are adapted for its
corporate and private customers in Sweden. These services have
mostly started out in smaller companies
that were later acquired by Telenor. As a result, the company
itself has a different market positioning for
each type of service. According to Hedblom, Telenor is
“struggling to find its unique position in the
marketplace” (Hedblom, Interview on the Business-IT
Alignment at Telenor Sverige AB, 2009), in
contrast to its main competitors – Telia, Tele2 and 3 – that
already have clearly defined positions.
However, each of Telenor’s subsidiaries has a more clearly
defined market position in relation to its
competitors. For example, Bredbandsbolaget had attained
product leadership by establishing itself as the
highest broadband speed provider. Today, speed is no longer
exclusive for Bredbandsbolaget, as
competitors have imitated this strategy and are able to provide
the similar speeds to their customers.
Therefore, Bredbandsbolaget is now defending its position in
the market by offering new ways and new
functionalities for broadband that the customers can have
(Hedblom, Interview on the Business-IT
Alignment at Telenor Sverige AB, 2009). Another important
thing to mention is that Telenor has for
some time been focusing on M2M services, and has managed to
achieve a strong position in that domain.
M2M and telematics are a major part of the company’s
processes, and have empowered the governance of
Telenor through alliances with other big companies. For

example, the company has established an
agreement with DaimlerChrysler, which consists of
implementing an M2M network between European
trucks through SIM cards provided by Telenor (Telenor Group,
2009).
As for the strategic fit between Telenor’s business strategy and
its organizational strategy, the actual
structure of the company must be observed. In fact, Telenor
Sweden belongs to the Telenor Group, but –
as other subsidiaries – the company has its own management
group that can be closely associated with a
geographic organization. Moreover, Telenor Sweden has
acquired and encompasses several subsidiaries,
which initially had their own organizational structures that were
rather decentralized. However, as the
company is fighting to achieve a strong position in the market,
it needed to reduce its costs and to provide
a unified point of contact with its customers. As a consequence,
Telenor has undergone several
reorganizations, with the biggest occurring in the fall of 2008
(Hedblom, Interview on the Business-IT
Alignment at Telenor Sverige AB, 2009). This change in
organizational design was mainly motivated by
the need to align the business with the organizational and
administrative structures, and thus achieve a
strategic fit that would help the company gain competitive
advantage.
Innovative and business-aligned IT strategies will create
competitive advantages for the organization.
Implementing fast and timely strategic fit between IT strategy
and IT infrastructure is a challenge for
most of companies, including Telenor. In implementing its e-
learning system, for instance, one of
Telenor’s main challenges resulted from slow changes to the
needed infrastructure in order for employees
to be able to start working on the system (Netteland, Wasson, &

Mørch, 2007).
4.2 Functional Integration
At Telenor, in terms of functional integration, IT is primarily
seen as an enabler, and to some extent a
driver, of business processes and strategy execution (Ålander,
2009). In the following section, the
functional integration between IT and business, both in the
external domain – i.e. the alignment between
business strategy and IT strategy – and the internal domain –
the support provided by the IT infrastructure
to the organizational structure – is described along with its
implications. As IT is primarily employed as
an enabler, IT will be used as the starting point to see how it
supports the analogous components on the
business side.
On a strategic level, IT should support and enable the business
strategy through appropriate scope, unique
competencies, and effective governance. In terms of scope,
Telenor’s self-service customer portal is an
example of a critical IT system that was developed to reduce the
burden on its call centers, and to enable
new, personalized services for the customers (Accenture, 2009).
This customer support application plays
a critical role in supporting the scope of Telenor’s business. In
terms of competencies, Telenor in the year
2000 decided to employ e-learning systems. This systemic
competency was leveraged to enable and
enhance Telenor’s business competencies – including the ability
to keep costs low – and to enable
Telenor’s staff, to learn faster than its competitors (Netteland,
Wasson, & Mørch, 2007). Finally, in terms
of governance, Telenor has formal steering committee meetings

regularly and shares risks across IT and
business partners. Every six months, IT and business
management have an overall steering committee
meeting where the IT group presents the costs and the
committee decides upon prioritizing and investing
on IT projects (Hedblom, Interview on the Business-IT
Alignment at Telenor Sverige AB, 2009). Telenor
has a steering model – a ‘road tracking model’ – which
management uses to define resources, and to
prioritize, plan and define IT programs (Ålander, 2009).
Furthermore, by having the CIO as an active
member of the corporate management team, Telenor are
attempting to ensure that strategic choices by
business and IT remain explicitly linked.
On an operational level, the IT infrastructure needs to support
the organizational infrastructure. In terms
of IT architecture, it is currently not supporting the
organizational structure adequately since it has not
been integrated on an enterprise-wide level. They have shared
access points and other, similar, means of
integration; however, there remain considerable issues, such as
the existence of multiple LANs. Attempts
of enterprise-wide integration are being undertaken and will be
achieved in due course. A successful
example of this has been the merging of different customer
billing systems, such as those of
Bredbandsbolaget and GlocalNet. Such initiatives clearly aim to
support the organizational structure. In
terms of processes, functional integration is also being pursued
actively. As one of the key business
managers at Telenor, Mr. Hedblom (Interview on the Business-
IT Alignment at Telenor Sverige AB,
2009) explains, on the operational level, IT staff work closely
with business staff in order to build
effective systems for supporting business processes. Finally, in
terms of skills, both IT and business staff

are trained to work in cross-functional teams, and to be able to
take inter-unit roles on demand.
5. Application of Luftman’s Strategic Alignment Maturity
Model on Telenor
Communication
The most important indicator of alignment in communication
between IT and business is whether
business managers perceive IT as a strategic business partner.
Telenor’s communication maturity
alignment is assessed to level 3. IT management at Telenor has
a reasonably good understanding of IT;
however, Telenor’s business manager sees the IT department
only as a service provider for the company
(Hedblom, Interview on the Business-IT Alignment at Telenor
Sverige AB, 2009). Business awareness
within IT is facilitated by business analysts and the IT
enterprise architectures group who are responsible
for translating business needs to IT staff. Senior level managers
are aware of the importance of IT, and the
CIO, Krister Skålberg, is an active member of the corporate
management team. Also on the operational
level, in implementing IT projects, there are cross-functional
teams where IT and business staff work
closely together. In the mid-level management level, however,
communication of strategy is more on an
ad-hoc basis with no formal and regular meetings (Hedblom,
Interview on the Business-IT Alignment at
Telenor Sverige AB, 2009). Recently, Telenor has been
improving this aspect by placing more emphasis
on formal IT-business meetings, which take place once every
quarter (Ålander, 2009). Moreover,
business managers have been asked to work closer with IT unit
staff: to co-operate and to consider their
opinions and ideas regarding strategy and projects (Ålander,

2009).
Other important factors in communication maturity are the
learning and knowledge sharing processes
between IT and business staff. Telenor has been improving its
learning and knowledge sharing strategies
by implementing an e-learning system (Netteland, Wasson, &
Mørch, 2007). Telenor has a reporting
system for projects that keeps track of knowledge, skills and
time that employees work on business
programs (Hedblom, Interview on the Business-IT Alignment at
Telenor Sverige AB, 2009).
Competency/Value Measurements
Like many other organizations, Telenor’s IT unit is struggling
to demonstrate its value in terms that
business understands. Telenor’s competency/value measurement
maturity has thus been assessed to level
2+. As Mr. J Hedblom (Interview on the Business-IT Alignment
at Telenor Sverige AB, 2009) explained,
there are no service level agreements for internal IT projects.
Technical reports are mostly based on the
performance of individual pieces of hardware and software,
including measurements such as uptime.
Hedblom would prefer to measure “the actual service distributed
to the customer”, which would entail
adding up the chain of hardware and software that make up the
service. Moreover, Ms. H Ålander
(Interview on the Business-IT Alignment at Telenor Sverige
AB, 2009) said that at Telenor Sverige,
where different companies have been merged together, the main
competency of IT lies in making
business processes more efficient.

Governance
IT governance maturity emphasizes the importance of formal
and regular meetings to prioritize and
allocate resources for IT projects. At Telenor, the CIO is a
member of the corporate management team,
which is responsible for planning the overall strategy. On the
architectural level, IT is mainly responsible
for translating business strategy into IT strategy and technical
requirements (Ålander, 2009). IT still has a
limited strategic planning role and it is seen by some parts of
the business as a cost center in the company
Sverige AB, 2009). Telenor’s governance
maturity level is notwithstanding this assessed to 3+ due to the
high level of cooperation at the senior
management level. Furthermore, the reporting system at Telenor
is federal, where the CIO reports directly
to the CEO. The frequency of steering committee meeting
depends on the project complexity. An overall
steering meeting takes place every six months, where top
management re-evaluates its strategy and
decides on the implementation steps to achieve its strategic
goals (Hedblom, Interview on the Business-IT
Alignment at Telenor Sverige AB, 2009). Telenor has a steering
model – a so-called ‘road tracking
model’ – which they use to define resources, as well as to
prioritize, plan and define IT programs
Sverige AB, 2009).
Partnership
The relationship maturity between IT and business is an
important enabler for the alignment process.
Telenor is assessed to level 3+ due to its recent endeavors to
improve the partnership between IT and
business. The score is kept down since business still sees IT as

cost of doing business. Although IT
should be an enable – and potentially a driver – of business
strategy in order to provide competitive
advantage for the company, Telenor currently faces some
problems in its execution of IT projects. For
example, in mobile services, there is a lack of clear and
structured processes, and deadlines are not
adhered to. This constitutes a big business risk for Telenor, as
such IT projects are more of an inhibitor
than an enabler for the business (Hedblom, Interview on the
Business-IT Alignment at Telenor Sverige
AB, 2009). While, interestingly, according to Ms. Ålander, IT is
an enabler and sometimes even a driver
of business process innovation. For example, in merging
companies, IT projects can drive business
process change to make the business more efficient (Ålander,
2009). These two contradictory views of IT
and business partnership illustrates that IT and business lack
something in terms of their relationship in
the company (Ålander, 2009).
Scope and Architecture
This criterion defines to what extent IT can be integrated at
varying levels of the organization: functional,
enterprise or inter-enterprise. Telenor achieves level 2+ in
scope and architecture maturity, as ERP
systems are employed within the organization (Ålander, 2009);
however, the integration is predominately
achieved through shared access points to folders and by filling
in various reports. Another nuisance is
presented by the existence of multiple LANs, one for each
operation, forcing higher-level managers
responsible for more than one operation to shift frequently
between them in order to gain adequate access

(Hedblom, 2009). As Telenor has merged four different
companies, the subsequent integration of the
different systems has been, and remains, an important
responsibility for Telenor’s IT department. Telenor
is currently working to achieve enterprise level integration. For
instance, Bredbandsbolaget and
GlocalNet had different customer billing systems, which
Telenor decided to merge in order to promote
enterprise-wide consistency (Ålander, 2009).
Skills
Skills maturity involves all human resource considerations,
including innovation, entrepreneurship,
change readiness, cross-functional responsibilities and
education, as well as the organization’s social and
political environment. Telenor is assessed to level 3+ in terms
of skills maturity. Telenor’s management
promotes informal discussions and makes decisions primarily
based result consensus. The company’s
power has traditionally resided in the functional units, but
recently the company’s power has shifted and
started to emerge across the organization. Telenor encourages
career crossover outside the top
management level and across the functional organization. IT
and business staff are ready to take new
responsibilities within both IT and business departments. For
encouraging innovative ideas in the IT
department, enterprise architects along with domain architects
are responsible for discovering new ideas.
Telenor’s three levels of innovation are: business innovation,
social innovation, and technology
innovation. The social innovation level emphasizes the
employment of social innovation, such as global
teams and communities of excellence (Netteland, Wasson, &
Mørch, 2007). As Mr. Hedblom (Interview
on the Business-IT Alignment at Telenor Sverige AB, 2009),

business manager at Telenor, explains,
business staff is being trained and educated to maintain closer
co-operation with the IT department.
A detailed outlook of the attributes of each criterion is available
as Appendix E.
CRITERION ASSESSED LEVEL
COMMUNICATION 3
COMPETENCY/VALUE
MEASUREMENTS 2+
GOVERNANCE 3+
PARTNERSHIP 3+
SCOPE &
ARCHITECTURE 2+
SKILLS 3+
Table 1 Telenor Sverige AB placed on an alignment maturity
scale
6. Application of McFarlan’s Strategic Grid on Telenor
Although this research did not include a detailed analysis of
Telenor’s project portfolio, the interviews
with Ms. Helene Ålander, Head of Planning & Design of IS/IT,
and Mr. Jesper Hedblom, Head of
Product Management, gave some indications as to Telenor’s
current position on the strategic grid. Telenor

has four overarching programs within IS/IT in which IT projects
are grouped. Two of these are dedicated
to new products, while the other two dedicated to support
business processes and administration. Without
knowing how the budget is spread across these programs, this
would ostensibly indicate that IT has a
strategic value in addition to its more traditional supportive
role. Ålander also contends that this is the
case, and she did not wish to say that IS/IT has a greater impact
on business operations than on business
strategy (Ålander, 2009).
Another factor indicating the appropriate position on the
strategic grid is with whom the responsibility for
designing, implementing and managing IT initiatives lies. On
the strategic level, the responsibility
appears to rest solely on IS/IT, with the business strategy
merely being one of the inputs - albeit a very
important input. On the architectural level, there appears to be
closer cooperation between business and
IT, with workshops as a means for business goals to be
communicated to IT (Ålander, 2009). However, it
still seems to be a matter of business strategy driving IS/IT
initiatives rather than vice versa.
To get a more comprehensive picture of the de facto workings,
it is also necessary to consider the
perspective of business. According to Hedblom (Interview on
the Business-IT Alignment at Telenor
Sverige AB, 2009), IS/IT has a certain level of impact on
business strategy at the top level, as the CIO,
Krister Skålberg, is part of the corporate management team. As
of yet, there is however nothing formal set
up on a strategy level in order to promote business-IT alignment
– this is supposedly in the process of
being done. On the architectural level, communication is
predominantly done on an ad-hoc basis. This
communication is mostly one-way, where product managers

ensure that the architectural teams are
meeting the business needs. On the project level, there are often
cross-functional teams working together.
Hedblom believes that communication between IT and business
has improved in the past six months; in
fact, this was one of the tasks that were given to him when he
joined Telenor.
Interestingly, in contrast to Ålander, Hedblom perceives IT as a
cost rather than a strategic asset, although
he recognized its potential as the latter. In fact, on the mobile
side, Hedblom showed concern about the
inability of IT to support adequately ‘time to market’: he
labeled this issue one of Telenor’s currently
largest business risks. To some extent, he thus views IT as
constituting a limiting factor when it comes to
strategy execution. An ongoing discussion is taking place
between product management and IT regarding
this issue (Hedblom, Interview on the Business-IT Alignment at
Telenor Sverige AB, 2009).
Impact on
Business
Operations
High Factory Strategic
Low Support Turnaround
Low High
Impact on Strategy
Telenor Sverige

Figure 1 Telenor Sverige AB placed on McFarlan's Strategic
Grid
In light of these comments, IS/IT at Telenor is arguably still
best placed in the factory quadrant of the
strategic grid. The impact of IT projects on business operations
is - as would be expected from a telecom
company - high, and cross-functional teams are often
responsible for designing, implementing and
managing those projects. As a more formal forum is in the
process of being set up to promote further
alignment of business and IS/IT, and as business seems to
recognize the potential of IT to act as a
strategic partner, it will in due course be able to move into the
strategic quadrant.
7. Conclusions
Telenor Sverige AB has demonstrated awareness of the need to
align IT with business through the many
initiatives it has undertaken recently in the endeavor of further
promoting this process. It realizes the
potential of IT as a strategic partner in an increasingly
competitive and turbulent market, although it is
still primarily perceived as an enabler. The fact that the CIO,
along with other senior IT executives, are
part of the corporate management team, and thus has a say in
strategy planning, is a good indicator of this.
The architectural teams are dedicated to ensuring the effective
communication of business strategy to IT –
a requisite for successful alignment. This communication and
cooperation process is further facilitated on
the operational level by frequent employment of cross-
functional teams. Moreover, senior managers, such

as Jesper Hedblom, Head of Product Management, have been
asked to work closer with IT.
That said, it should be noted that complete alignment is a never
ceasing endeavor rather than an attainable
objective. Telenor, like many other information intensive firms,
are struggling with this. This fact is
primarily manifested by the dissimilar perceptions of IT in the
organization. According to Helene
Ålander, Head of Planning and Design of IS/IT, the role of IT is
both to support business operations and
to exploit strategic opportunities. This view is not mirrored by
Jesper Hedblom, Head of Product
Management, who views IT as primarily constituting a cost of
doing business. Mr. Hedblom was
concerned with the inability of IT – on the mobile services side
at least – to adhere to project deadlines,
thus hampering its ‘time to market’ abilities.
Some of the difficulties that Telenor is currently facing stem
from the fact that it has fairly recently
become a conglomerate as a result of its aggressive acquisition
strategy. The merging of numerous
companies, each with their own business strategy,
organizational design and information systems, is a
daunting task. The integration process is well underway, with
the successful integration of several
disparate billing systems serving as testimony to that.
Enterprise-wide integration has, however, not been
accomplished yet.
The various theoretical models and frameworks that were
applied on Telenor confirmed many of the
above findings. For instance, when Luftman’s maturity model
(section 5.2) was applied on Telenor, the
organization was assessed to level 3 – on a scale from 1 to 5 –
in terms of strategic alignment maturity
between business and IT. This level indicates that the

organization has an established process for aligning
business and IT. To reach a higher level, Telenor is advised to,
for instance, employ balanced metrics,
where business managers can measure IT project results not
only on a unit level but also on a service-to-
customer level.
On McFarlan’s strategic grid (section 6.2), Telenor was
positioned in the factory quadrant, while showing
signs of moving into the strategic quadrant in due course. This
indicates that IT has a large impact on
business operations, but less so on strategy. Perhaps further
empowerment of IT will speed this process
along and effectively allow Telenor to move into the strategic
quadrant.
8. Further Research
As of yet, in-depth research has not been conducted on
Telenor's business-IT alignment due to limitations
imposed on the authors. Further research could follow many
paths, perhaps using the work presented in
this paper as a basis. Two complementing issues would be of
particular interest.
Obviously, one direction would be to deploy better means of
investigating Telenor's fit into the theoretical
models. Having the possibility to interview two key managers,
one from the business side and one from
the IT side of Telenor, provides a very solid outlook, but not a
complete view. Strategies are always
initiated at the top level of the company, but strategies are
coordinated and managed at the next levels as
well, leaving room for important details to be concealed.
Research needs to be done on the entire project
portfolio to determine the de facto role of IT, its impact on
business operations versus strategy.

Furthermore, it is not only the vertical perspective of Telenor
that needs to be addressed, but also the
horizontal. Our research could be aided further by interviewing
other top managers at Telenor Sverige
AB, like the Infrastructure Manager, presently Magnus
Zetterberg.
Theory has predominantly sprung out of observations and
inferences from case studies. In other words,
there will always be theoretical aspects that are modeled for the
first time or remodeled based on what
reality shows. Therefore, one key aspect of future research
would be to think out of the box and see which
innovative methods and processes does Telenor Sverige AB
employ that could shape new concepts
regarding the alignment between its business and IT strategies.
More empirical studies need be conducted
and Telenor Sverige AB fits this placeholder of analysis to a
large extent due to its recent acquisitions and
the experience of the Telenor Group.
Bibliography
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IT Alignment at Telenor Sverige AB. (A.
Neculau, S. Habib, A. Henriksson, M. Magarian, & Y. Liu,
Interviewers) Stockholm.
Hedblom, J. (2009, April 29). Interview on the Business-IT
Alignment at Telenor Sverige AB. (A.
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C. (2004). Managing the Information
Technology Resource: Leadership in the Information Age.
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Alignment at Telenor Sverige AB. (A.
Abstract1. Introduction1.1. Background1.2. Research Goal1.3.
Research Methodology1.4. Resources1.5. Limitations1.6. Target
Audience2. Telenor Sverige AB2.1 Background2.2 Business
Strategy2.3 IS/IT Strategy3. Application of Information
Systems Strategy Triangle on Telenor4. Application of
Venkatraman’s Strategic Alignment Model on Telenor4.1
Strategic Fit4.2 Functional Integration5. Application of
Luftman’s Strategic Alignment Maturity Model on
TelenorCommunicationCompetency/Value

MeasurementsGovernancePartnershipScope and
ArchitectureSkills6. Application of McFarlan’s Strategic Grid
on Telenor7. Conclusions8. Further ResearchBibliography

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